In response to questions from lawmakers on Wednesday, Liz Truss, the British prime minister, said she would not impose a windfall tax to pay for any energy bill freeze intended to counteract sharp increases in the price of gas and electricity.
Truss, who officially took over from Boris Johnson on Tuesday, stated that she would lay out her proposals for an economic support package on Thursday in order to prevent a crisis from worsening over the coming months.
She is apparently putting together measures worth up to O130 billion ($150 billion) to freeze energy costs for struggling homes and businesses, many of which run the risk of going bankrupt this winter.
But when opposition Labour leader Keir Starmer asked if this would be funded by a windfall tax on energy companies’ profits, Truss responded: “I am against a windfall tax.
“I believe it is the wrong thing to be putting companies off investing in the United Kingdom, just when we need to be growing the economy.”
She added: “This country will not be able to tax its way to growth.”
With inflation already in double digits and at 40-year highs, the exchange set the tone for the discussion on how to deal with the anticipated economic hardship in the future.
Truss ran for office on a platform of tax cuts, despite concerns that they might increase inflation and uncertainties over how to pay for them.
As Truss entered Downing Street on Tuesday for the first time as prime minister, she was optimistic about the future of the economy.
“I am confident that together we can ride out the storm,” she said.
But Starmer said that ordinary people faced paying for her policies.
